A key focus of the agenda discussed by the IMF’s Executive Board on November 24 will be to spur inclusive, job-rich growth. The new work program stresses the need to manage monetary normalization in advanced economies, enhance the quality of public expenditure, safeguard financial stability, and carry out structural reforms to raise productivity and strengthen growth.
The twice-yearly discussion of the IMF’s work agenda translates the Global Policy Agenda into a specific action plan for the institution over the next 12 months. The Global Policy Agenda was presented by Managing Director Christine Lagarde at the IMF-World Bank Annual Meetings in October.
IMF Survey spoke with Siddharth Tiwari, Director of the IMF’s Strategy, Policy, and Review Department, about the main features of the work program.
IMF Survey : The 2014 Annual Meetings highlighted the urgency of preventing the global economy from settling into a “new mediocre” of poor growth and paltry job creation. How does the work program address this problem?
Tiwari: Indeed, the current global economic situation is disconcerting, with around 200 million people still unemployed six years after the global financial crisis. Our view is that supportive fiscal and monetary policies need to work in tandem with structural policies to accelerate the recovery.
The IMF will examine in the coming months how structural reforms such as increasing infrastructure investment, lowering barriers to trade, reducing tax distortions, and promoting financial deepening and inclusion can jump-start growth. This work will be complemented by looking at the role fiscal policy can play to raise long-term growth. Obviously, there is not a one-size-fits-all approach and our analysis will focus on the needs of different groups of countries.
In addition, the 2014 Triennial Surveillance Review also made recommendations on how we can address structural reform issues in the IMF’s surveillance, and we will be following through with these recommendations in the months ahead. Bold measures are needed to help overcome the risk of getting stuck in a “new mediocre” and, as usual, the IMF will be there to assist its members.
IMF Survey: You mentioned the role of fiscal policy in raising economic growth. What work is planned in this...